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Advance Auto (AAP) Q2 Earnings Miss Estimates, Guidance Trimmed
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Advance Auto Parts, Inc. (AAP - Free Report) reported adjusted earnings of 75 cents per share for the second quarter of 2024, which missed the Zacks Consensus Estimate of 97 cents. The company reported an adjusted earnings per share (EPS) of $1.43 in the year-ago quarter.
Advance Auto generated net revenues of $2.68 billion, which marginally beat the Zacks Consensus Estimate of $2.67 billion on higher-than-expected comparable store sales. Comparable store sales increased 0.4% year over year. We projected a decline of 0.1% for the same. The top line remained flat year over year.
AAP reported an operating income of $71.8 million, which declined from $125.9 million recorded in the corresponding quarter of 2023. SG&A expenses totaled $1.04 billion for second-quarter 2024, up 2.8% year over year.
Advance Auto Parts, Inc. Price, Consensus and EPS Surprise
The company had cash and cash equivalents of $479.4 million as of Jul 13, 2024, compared with $503.5 million as of Dec 30, 2023. Total long-term debt was $1,787.9 million as of Jul 13, 2024, compared with $1,786.4 million as of Dec 30, 2023. In the second quarter of 2024, net cash provided by operating activities and negative free cash flow totaled $87.8 million and $4.6 million, respectively. AAP’s board declared a cash dividend of 25 cents per share, which will be paid out on Oct 25, 2024, to all common shareholders of record as of Oct 11, 2024.
As of Jul 13, 2024, the company operated 4,776 stores and 321 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. It also served 1,138 independently owned Carquest-branded stores across these locations, in addition to Mexico and various Caribbean islands.
AAP has signed an agreement to sell Worldpac to private equity firm Carlyle Group for $1.5 billion in cash. The deal is anticipated to be completed by the end of the year.
Revised 2024 Guidance
Advance Auto has revised its full-year 2024 guidance. It now expects 2024 net sales in the band of $11.15-$11.25 billion, down from the prior estimate of $11.30-$11.40 billion. Comparable store sales are projected to be negative 1% to 0%, down from the previous estimate of 0-1%. The operating income margin is envisioned in the range of 2.1-2.5%, down from the previous estimate of 3.2-3.5%.
AAP expects 2024 capex in the range of $200-$250 million. The company projects a minimum free cash flow of $100 million, down from the earlier guidance of $250 million. Earnings per share are expected between $2 and $2.50, down from the previous estimate of $3.75-$4.25.
Zacks Rank & Key Picks
AAP currently carries a Zacks Rank #5 (Strong Sell).
The consensus estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.71% and 35.46%, respectively. EPS estimates for 2024 and 2025 have improved 51 cents and 37 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.58% and 215.89%, respectively. EPS estimates for 2024 and 2025 have improved 65 cents and 80 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for PLOW’s 2024 sales and earnings suggests year-over-year growth of 6.45% and 60.4%, respectively. EPS estimates for 2024 have improved 15 cents in the past 30 days.
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Advance Auto (AAP) Q2 Earnings Miss Estimates, Guidance Trimmed
Advance Auto Parts, Inc. (AAP - Free Report) reported adjusted earnings of 75 cents per share for the second quarter of 2024, which missed the Zacks Consensus Estimate of 97 cents. The company reported an adjusted earnings per share (EPS) of $1.43 in the year-ago quarter.
Advance Auto generated net revenues of $2.68 billion, which marginally beat the Zacks Consensus Estimate of $2.67 billion on higher-than-expected comparable store sales. Comparable store sales increased 0.4% year over year. We projected a decline of 0.1% for the same. The top line remained flat year over year.
AAP reported an operating income of $71.8 million, which declined from $125.9 million recorded in the corresponding quarter of 2023. SG&A expenses totaled $1.04 billion for second-quarter 2024, up 2.8% year over year.
Advance Auto Parts, Inc. Price, Consensus and EPS Surprise
Advance Auto Parts, Inc. price-consensus-eps-surprise-chart | Advance Auto Parts, Inc. Quote
The company had cash and cash equivalents of $479.4 million as of Jul 13, 2024, compared with $503.5 million as of Dec 30, 2023. Total long-term debt was $1,787.9 million as of Jul 13, 2024, compared with $1,786.4 million as of Dec 30, 2023. In the second quarter of 2024, net cash provided by operating activities and negative free cash flow totaled $87.8 million and $4.6 million, respectively. AAP’s board declared a cash dividend of 25 cents per share, which will be paid out on Oct 25, 2024, to all common shareholders of record as of Oct 11, 2024.
As of Jul 13, 2024, the company operated 4,776 stores and 321 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. It also served 1,138 independently owned Carquest-branded stores across these locations, in addition to Mexico and various Caribbean islands.
AAP has signed an agreement to sell Worldpac to private equity firm Carlyle Group for $1.5 billion in cash. The deal is anticipated to be completed by the end of the year.
Revised 2024 Guidance
Advance Auto has revised its full-year 2024 guidance. It now expects 2024 net sales in the band of $11.15-$11.25 billion, down from the prior estimate of $11.30-$11.40 billion. Comparable store sales are projected to be negative 1% to 0%, down from the previous estimate of 0-1%. The operating income margin is envisioned in the range of 2.1-2.5%, down from the previous estimate of 3.2-3.5%.
AAP expects 2024 capex in the range of $200-$250 million. The company projects a minimum free cash flow of $100 million, down from the earlier guidance of $250 million. Earnings per share are expected between $2 and $2.50, down from the previous estimate of $3.75-$4.25.
Zacks Rank & Key Picks
AAP currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the auto space are Dorman Products, Inc. (DORM - Free Report) , Blue Bird Corporation (BLBD - Free Report) and Douglas Dynamics, Inc. (PLOW - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.71% and 35.46%, respectively. EPS estimates for 2024 and 2025 have improved 51 cents and 37 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.58% and 215.89%, respectively. EPS estimates for 2024 and 2025 have improved 65 cents and 80 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for PLOW’s 2024 sales and earnings suggests year-over-year growth of 6.45% and 60.4%, respectively. EPS estimates for 2024 have improved 15 cents in the past 30 days.